Ryan Treft: Why I Turned Down a Guaranteed 6-Figure Income

Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.

---

Hey everybody. Thanks for joining for another episode of learningfromothers.com. And today we have Ryan Treft and, uh, Kyle last, uh, one of our last podcasts, we had Sean Boucher who Ryan knows, and we nicknamed Shaw the King of culinary something. Right. That sounds right. Can you buy it? Ryan is the King of Facebook profile pictures.

I didn’t do, I guess I didn’t do enough stocking before I started this. Cause I didn’t get a chance to see any of this. Yeah. Yeah. I used to be more active with that. I used to, I used to change it up almost every day, but uh, I don’t pay enough attention to it anymore. So, um, quick background on Ryan and then we can jump into selfies or pictures.

So, um, Ryan is kind of a, one of those serial entrepreneur and a guys. Um, he had one of the fastest growing companies from 2007 and 2012 with zombies. And then now he’s part of ifs three 60, which is a top five fastest growing you talk company. And then he’s, um, what I think is cool is his whole world. Um, a lot of his world that I’m familiar with is watching successful campaigns on Kickstarter, which is this whole different type of off what I consider optimization and different platform.

And I think that’s cool. And, uh, I want to get into more what that was with Ryan. So, Ryan, thanks for joining us. Yeah. Happy to be here, man. So, um, yeah, so, uh, fake Facebook profiles or it can all, we hit that one. Um, Ryan is the King, uh, funny pictures on there. Um, so I don’t think Ryan has nearly, nearly any pictures of his, of his self on Facebook.

Never. I’ve never added a picture of myself as my profile and it, it, it started out as just like this funny thing that. I never took Facebook seriously back when I first signed up and I just post stupid pictures and it reached a point to where maybe not every day, but almost every day I get somebody’s texting me or emailing me or messaging me some pics.

And Hey, you should use this one. And, um, I got a few buddies that, uh, they get excited every time there. They’re texts naked under my profile. I think I’ve actually sent you one in the past. So that group B club. That’s awesome. So why don’t we talk about, um, Well, why don’t we start with Sue B’s as far as I know, that’s kind of your, your first successful company.

Um, you’re welcome to go further back and your background on that, but why don’t you tell us about what two BS was, um, when you launched it and how did you launch it? How did you get involved? Was it kind of your baby? Did you go in on it with somebody and walk us through the evolution of that product and company?

Sure. So coming out of college, um, I had to, I had really two choices. One, I got this job offer to move to Colorado. Uh, I didn’t know anybody in Denver. Um, I would have taken a six figure job and they would have paid for grad school, which I didn’t really want to do, but I thought if they were gonna pay for it, I might do that.

And so I, I went out to Denver. I looked at houses. I, you know, um, Was giving it some, you know, more than serious consideration. In fact, I was leaning towards doing it. And in right at that same time, a friend of mine, uh, JC smooth showed me some toys that he invented a new stuffed animals that turned into pillows and blankets.

And he said, Hey, you know, we need a sales guy. Um, you know, Know, he didn’t know anybody. That’s a veteran in the toy industry. And even if he did, he wouldn’t be able to pay him. So he just said, look, if you, if you want to work with us, then, um, give you equity. Can’t really pay you for at least a year. Um, but if you want to do this, and so it was like this, you know, fork in the road, right?

Do I take the bird in the hand and go the safe route, supposedly where. I would have to move, but I know that I’m getting some cash and some upside with commissions and paying for school and I could buy a house and all this, you know, this was back when everybody thought the housing, market’s just going to go up and up.

This is 2006, uh, end of 2006, beginning of 2007. But, um, you know, of course I, I chose the, uh, the less, the riskier route and. Chose to do the toy thing. And, um, you know, we went to toy fair in February of 2007 and I wouldn’t actually wouldn’t recommend it launching a business this way, but we, we had a gigantic booth.

It was a 10 by 20, we flew out six or seven friends and we had a whole container of products in route. Um, so all this money was spent. And, uh, nobody had any idea whether or not people would care about this product. And, you know, thankfully we lucked out. I think we, I think we signed up 80 something, uh, accounts there and had all this interest from international distributors and press people and, and, you know, a way it went.

And so that first year we just grew and grew, we did over a million bucks and. And, uh, yeah, we’ve had for several years fast forward a couple of years, you know, we’ve got this multimillion dollar, uh, business and I get to travel all around the world. And I was thoroughly enjoying myself. Obviously, you know what happened in 2008?

And that, that company in Denver, that was the supposedly safe route. They, they folded. And so obviously I was glad I chose the route that I did. That’s crazy. Um, so did you already have the entrepreneur spirit to kind of take that leap of faith or, or what pushed you down that path? More so than the perceived safe path?

I think I always have, you know, um, I think back on like, when was the first time I got a sense for this, I remember a kid named Russell Hanson up the road that was willing to come in. Pull our dandy lions for, I don’t know, call it 2 cents a dandy lion. And I negotiated with my dad to pay me 5 cents for every dandy line picked.

And I played, played middleman on that deal. And I was kind of hooked ever since. And just kind of, I was always scheming the first time I ever heard the word entrepreneur. I remember it was. It was my friend, Matt handy, who, you know, um, talking to his mom about how, how I’m always scheming to make money.

And, you know, she said, Oh, well, he’s an entrepreneur. And I said, well, what’s that? And she described it to me and I thought, I mean, this was in like seventh grade or something. I thought, yeah, that is what I am. I think that’s what I want to be. So I think it’s always been there in college. I paid my way through school with, um, A little bit of help from the parents, a little bit, a couple of scholarships, but also, um, navigate in my own way by having an advertising company, which, which didn’t do a whole lot, but it brought in enough money that I was just fine coming out of school and I could then afford to, uh, You know, take that first year Zubie is getting paid.

I think I probably got paid $2,000 a year. One, like it was nothing. It did. So your, your partner that you are, that approached you about doing toy sales, you had mentioned that they didn’t have anybody with experience. Did you have any, any experience or what made them approach you about it? It was brick and mortar.

I had zero. Um, we, in fact, I remember the first time. We took an order. I was filling out an order form. I mean, we didn’t, you weren’t taking credit cards back then. You were manually filling them out on pieces of paper. And we had clipboards to do that. Um, I mean, this is, it was old school and I remember trying to calculate, what should I charge these people for sales tax on that first order?

We never even like, we just went for it. You know, we had no idea. We didn’t really, we weren’t prepared and people. You know, I remember this person asking me, she’s like, you have no idea what you’re doing. Do you know? I have no clue, you know, that’s, that’s what I, that’s what a lot of people. Yeah. That’s what deters a lot of people from, from jumping into things, right.

Is they feel like they have to have everything buttoned up and presentable and have all their research done and data for this and knowledge of that. But, uh, I think experiential knowledge is the best way to go. Just throw yourself into things trial by fire. Yeah. Kyle, what’s that? Um, what’s the name of the guy that was on Joe Rogan a while ago.

He’s the husband of the lady that started Spanx. Oh, Jesse something. Yeah, just see the NetJet. The only company that Jeff, he said the same thing. He said, I think it was on that Joe Rogan podcast. He said that he excelled in jumping into the unknown, like that. His way of becoming successful is the opposite of what everybody else does.

He’s just like, I got no idea. I’m all in. So it’s pretty good. Yeah, people get hung up on the small details and that’s his super power. His ability is just to be able to mitigate that and just go all in. Right. And so people will ask, you know, or are entrepreneurs born or made. And like, who’s, who’s to say that like, there’s several different paths that you can go.

And, but, but I would say it. Most of the entrepreneurs that I, that are in my inner circle. Like they’re just the type that have the, the, you know, the guts to just throw themselves into things, not knowing enough about it and just figure it out and plow forward. And is that a, is that a personality trait that you’re born with or is that something that you learn?

I don’t know how you can answer that without saying there’s a huge degree of both. Yeah. Yeah. So when, when the person called you up saying he didn’t know what you’re doing, and you’re doing these accounts, you said you had about 80 accounts on that first convention put, put that into perspective is 80 a lot.

Is that, is that decent? Is it beyond decent? Uh, for us it was a lot. I mean, we didn’t know if we were going to generate any orders and we just kept writing orders throughout the show and. This is, I mean, you go to a trade show today. There are plenty of people that go through trade shows and never write a single order, especially today where it’s mostly just a scope, things out, people collect their information, then they go home and they may or may not write an order.

Um, but back then, you know, it was, it was great to get any, any PO at a trade show, but to show up at your first one and go from. One order to another to another and then come home and get a bunch more. It was, it was awesome. Like we, we thought, Hey, this thing’s going to work. So as things continue to scale you, I think he said he got a million bucks or so in the first year.

Um, what happened next is so, so I, I believe you’ve since exited that company. So walk us through, so you’ve grown it. It’s doing well. And then what prompted the exit? Well, Zombies was both a success and a failure at the same time. Right. And you can learn from both. Um, but I say it was a success because yeah, year one, we had no idea what we were doing and we still managed to exceed a million dollars in revenue.

And we grew for, I don’t know, five years a year over year self never brought in outside money. Um, obviously reads. So it was me reading JC that were first guys in and, and, and also another gun in Travis Bush. Um, but the, the initial money that multi-varied kicked in and, uh, that that’s sustainable. Um, and we just kept growing.

Obviously we had a line of credit with the bank, and so, you know, here we are this, um, I think we got an evaluation done. It was, we were supposedly worth like 6 million bucks and we still had huge, you know, bright future ahead of us. But then there’s a lot of things that happened, like QVC had, who had been placing the huge purchase orders.

They all of a sudden decided that, uh, they weren’t going to show our product on television. Um, and so they sent it back. And they can do that. People don’t realize that QVC products are technically consignment or at least they were back. And I haven’t sold to them in a long time, but, uh, so QVC is awesome when they sell through which they did for years, but it’s not awesome when it it’s, uh, once they want to focus on something else and then they say, Hey, take this back.

So picture yourself in, in January, taking back. I think it was a million dollars worth of toys. And then your bank saying, well, we look at that inventory as dead inventory because we were projecting you can’t sell through it. So we’re going to take your line of credit. That was, I don’t know, call it half a million bucks and we’re going to make that next to nothing.

And, um, and, and we had all these other issues, the factory, um, decided overnight that they were going to Jack up our price and, um, One of our competitors, pillow, pets. They started dumping their product because their day in the sun with their infomercials was done. And so, yeah, you could buy that stuff for five bucks, whereas ours, we’re selling in Nordstrom and Dillard’s and Barnes and noble for 30, 35.

And so it was like, all these things happened at once that. You know, I guess we should have foreseen it, but nobody did. And, uh, it wasn’t obvious that all that was going to happen. And so we, we were back at square one where we’re like, okay, do we go back to, I’m not paying ourselves? Like we did year one and, and ride this out and try to turn this thing around.

Um, But I made one phone call to the guy that had talked to us for years about buying zombies. And I said, Hey, here’s the situation. It’s not pretty, but it’s obviously still worth something. It’s great brand. We have assets, you know, yada, yada, um, you’ll see the financials, but here’s what I’m thinking. And he said, okay, cool.

Two weeks later, he flew out and signed the deal. And that was it. Wow. Was that a relief for you at the time? Like, do you think back on that, are you glad you sold and got out when you did? Well, it could have been a hell of a lot worse. Um, it also could have been a hell of a lot better. So, so that’s why I say it was a mixed bag.

It was, it was successful and it was a failure. It’s like it was disappointing and disappointment is not what happens to you. Like if you would’ve told me. Early on like, Hey, uh, if you jump into zombies, here’s the end result. I would have taken it all day long, the travel, the excitement and knowledge, the money, you know, um, it was good for me.

Uh, but disappointment is now what happens to you, right? It’s it’s what happens to you. In relationship with in relation to your expectations. And so when my expectations will clear up here and it ended clear down here, even though that was greater than I would have imagined in the end, it still sucks.

Yeah. It’s amazing how fast things can change, especially in retail, just like you said, with QVC. Pushing inventory back, um, you know, all those other things happening within a short amount of time, and then you make that phone call and then, and then two weeks later, you know, the company’s gone. It’s amazing to me, how quick things like that can happen.

Yeah. And I see it all the time. I see with a lot of my friends business schools, I mean, most businesses fail and, and even the wildly successful ones, you know, you look at them over time and. Very few have real thing power. And so I, I, uh, I’m inclined to, to be fairly conservative and in how I take risks to grow the businesses that I’m involved with now, right?

Like I have this mentality of how can I pre-sell everything to mitigate my risk before I. Before I like, how can I create the demand before I create the supply, then you mitigate your risk versus how do I, uh, versus the field of dreams, mentality that a lot of people have where they, like we did in the beginning, zoomies.

Right. We had a whole container of product on the water. We. We didn’t just get a small booth at the trade show. We went big and we flew out all these people. I mean, that’s a lot of money. That’s a lot of money to spend before you have any idea, if anyone cares now your product. And so now what I like to do is I like to pre-sell everything that I’m involved with as much as I can, uh, one, because it’s educational and two, because it’s it’s, you can, you can pull that off sometimes.

And, uh, That will determine how you go about executing and launching products and product lines and companies. So that’s, that’s why, uh, you know, that’s why I like Kickstarter is you compare Kickstarter to just producing product and hope crossing your fingers, that people like it, um, like this, just to compare it.

If I, if I were to go in and launch, um, A line of hiking pants. I pay the factory, uh, call it 30% deposit. So I tie up that much capital. I wait four months until it’s produced it. I bring it in it’s a it’s a month on the water. So you’re into a five or six months before it finally hits your warehouse. And you’re, you’re all in on those things.

Cost of goods. And then, and then you have to sell it. So if you waited that long and then. You know, you get some feedback that people like blue instead of black or whatever, uh, or maybe, yeah. Season’s like, there’s all these things that could halt your growth. And then if you’ve tied up your capital and you’re not getting the demand that you hoped was there, you can find yourself in a real bind.

And, and even if it does work, like let’s say, let’s say that you bring that in and you shift in, uh, to, uh, dealers or Barnes and noble who might pay you a net 60 terms. Well, uh, if you’re waiting six months for your product to land and then you ship it out and then it lands in their stores and they pay you two months later, I mean, you could easily tie up.

Cash for inventory that you don’t get paid on for a full year. And in that split Kickstarter reverses that entire process because you launch, you determine how much demand there is, the cash is in your bank account and months and months before you even have to ship it. And, um, so it’s just a, it’s just a much better way to go about, um, launching product that might be.

Yeah. How did, so how did you get into the Kickstarter? I will, we’ll talk about, um, quality and PJM is, um, you’ve had these big successes, but how did you get to the point of understanding how to optimize Kickstarter and be successful? How to, did you have some trial and error with some other, other fixed articles?

Yeah, I still feel like, and then trial and error. Phase right. But, um, eh, there’s probably more Utah based Kickstarter companies per capita than just about anywhere. I would bet because there’s been over 5,000 of them. There was a great article on KSL about this. Like what’s going on in Utah with all these kicks are accompanies and a lot of them have been really successful.

And so I know a lot of these guys that have had. Um, seven figure, uh, or even six figure, um, successful campaigns. And so naturally I’m talking with them about their business and, and a lot of these guys were clients that had ifs three 60. And so when the thing came up, I mean, quality was not a client of ifs.

Um, but I knew those guys and their business was Mmm. Essentially bankrupt. They were insolvent and. And I met with them and, uh, well I met with Charlie, he’s the CEO and he’s the CEO now. But back then, he was just one of the partners and he was telling me how everything hit the fan. And yeah, they were doing the brick and mortar thing.

They weren’t selling, targeting people online. They weren’t, they’ve never lost a Kickstarter. And he was just telling me about all these problems that they had selling the same thing, basically taking the same path that I had taken at zombies, going to the brick and mortar route. And. And they, they didn’t have anything show for it.

So I met with them, the other partners and they said, no, we’re just going to clearance everything out and fire sell it. And I said, well, You know, don’t do that. How much do you think you can get out of it? And they gave me a number and that was basically the purchase price and that’s what we bought it for.

And so it was like months of cleanup, but I was diving in and figuring out like, what can we cut? And what can we focus on? That is differentiated, that has margin. And if it’s differentiated enough that it’s probably worthy of a Kickstarter and they had this a version, one of what was, what became the, could Shula a Kickstarter.

And we tweaked it a little bit, added some features and, and we, we launched that thing and it was, you know, it raised 250 and it was two 50, some thousand dollars. And, and that was obviously a huge boost to get that brand, uh, relaunched. Wow. First kick with the quality quality was your first. Yeah. Uh huh.

So what, um, I mean, as candidly, as you, as you can say was like, where you kind of making it tell you can make it with the idea of Kickstarter. Are you, or are you realistically confident as that as a strategy? I don’t know. I mean, I thought, I remember telling Charlie to set his expectations of funding at 30 to $50,000, but.

I mean, don’t, don’t expect much with, uh, the first time around, in a limited budget and a blanket that, you know, we sell for 80 bucks. I can’t remember what the Kickstarter price on it was, but I, I had very, very low expectations. Um, so in that sense, yeah, I wasn’t really faking it till I made it. I was just a really just testing the waters, but I mean, how much do you have to lose when you can get a video made for.

Uh, $4,000. So we spent on it and then you have like 10 grand budgeted to spend on ads. Yeah. And we should have spent a lot more, but we just didn’t think that it would do as well as it did. And so, you know, it was a nice little, I mean, the one benefit that that project had is had, even though they never sold directly, they never like.

Marketed directly to the end user. They still had a lot of customer emails, um, that, uh, that email that gave us a huge boost on that first campaign. What a stroke for you move on. What what’s this blanket made out of? What is it? So it’s a, it’s, it’s a waterproof. The one side is ripstop nylon and the other side is a little softer material, but we, we apply to DWR coating on it, which makes it water wicking.

Right. Oh waterproof, like, um, it’s, it’s water wicking. It, it packs up into a pillow. So in that sense, it’s kind of like, you know, bringing me back to the Zubie days, you know, it’s like an adult outdoors, the Zubie, it packs up into a pillow, but it also, we added snaps to turn it into a poncho. So it has a hood on it.

And, um, Yeah, that was that’s. What does it come presented? Like pitch you Lee or do I

not put Julie it’s? K a C H U L. Okay. I just, I just, I don’t know. That’s a great idea. We’ll consider that maybe that’s version we’ll launch the truly blanket and it’ll be a scented book and I’m sure it’ll be awhile too. I’ll be your first backer. Yes, but I appreciate it. I got it. My eyes are sweating a little bit here.

Uh, so, um, I was going to ask you what you think attributed to that. That’s the quality on Kickstarter, but you kind of touched on it a little bit, um, with like, you know, wrapping it up with ads, uh, ads, where, where are you putting ads? It’s Facebook driven. Okay. So you do ads and say, Hey, we’re launching this thing on Kickstarter.

It’s super cool. Go check it out. Yeah. And there’s several agencies that, that all their whole, uh, all they do is market Kickstarter campaigns. Sometimes they post Kickstarter, but their whole, the core of their business is, um, focusing on Kickstarter, backers and targeting people to. You know, drive Kickstarter campaigns and get them funded.

Yeah. Yeah. It’s cool. Like, um, like we said before, it’s amazing how many different verticals are out there and advertising that just, I’m just in my bubble so much. Uh, but then as soon as I’m exposed to these other ones, like Kickstarter, you know, uh, marketing agencies are focused on Kickstarter as a niche.

Uh, you know, it makes it, yeah. Um, all right. So you had a quality got that going. And then, um, PGM is I like PJ is I actually bought, I bought in on the Kickstarter funding. So tell us about PJM is thank you for that. So my buddy Craig Hammond, he’s the inventor. And about a year and a half ago, we met up for tacos and he showed me his.

Little sketch of a product. And I told him that I didn’t really get it. I thought it was a, I mean, I didn’t tell him to stupid idea. You know, I try to be nice to people, but I kind of thought it was a stupid idea. I didn’t really understand like why people would choose this product over say nighttime diapers.

And I told him as much. And I also told him, I said, however you go about this. Like, I don’t think Kickstarter is your thing, because if you want to see it. A Kickstarter campaign that failed. I mean, look at all the kids products that have gone on there. I mean, there’s wildly successful ones for companies that already existed that had massive email list, but startup children’s apparel, um, there’s, there’s, there’s a lot of failures there and I told them that cause Kickstarter, demographics, or.

You know, it’s, it’s it dudes that are in their twenties and thirties, that like cool features on their gadgets. You know, that’s, that’s what Kickstarter is for. It’s not for moms. Uh, generally speaking obviously, and that’s what I believe, but I guess I was wrong. So I told him, well, first of all, he wanted me to be involved in, in the beginning.

I just said, look, dude, let’s just meet once a month. If you buy me tacos, we’ll give you all this. Free advice that you want, and it’s probably worth no more than the cost of the tacos, but I’ll just kinda give you my thoughts. And, uh, but as it progressed and as, as he developed these prototypes, I finally got it and I realized, wow, these, these are more absorbent than nighttime diapers.

It trains the kid like, Hey, I’m not in diapers anymore. I’m a, I’m a big boy or a big girl. And, and it’s also more annoying when they do what the bed. And, um, and, and by the time that, you know, uh, probably six months go, I was, I was right in the mix of have my three year old at the time, pissing the bed every night.

And I did well, see, I, my wife would get upset. My wife mostly just eats every day and that’s a pain. Like nobody wants to wash sheets every single day. Um, so I started to grasp it. I liked how the product, uh, took shape and he asked me, you know, again, to invest in at that time I was ready to do it. I actually, um, actually took the video, the rough, the rough cut, the, the, you know, the, the beginnings of the video that ended up on Kickstarter.

And I showed it to my wife without, I had never, even, I’ve been meeting with Craig for a year and I never even told her about it. And, uh, and I, I didn’t lead her at all. I just said, Hey babe, come watch this video. She watches it. She didn’t say a word. It ends. I said, what do you think? She said, it’s brilliant.

I think you should invest in this, if you can. I said, all right. And that’s, that’s probably the only time that my wife has told me to invest. She’s usually talking me out of stuff. You know, when I tell her like, Hey, I’m going to put money into this. Like, are you sure, sure. You want to do that? Why is that going to, you know, it’s her job to question me and, and uh, but this time she was pushing me to do it and I did it.

And, but I still, I still believe. A lot of the same things that I told Craig in the beginning as to why, uh, the traditional route for Kickstarter is not going to work for this product. But I said, look, there’s one PR guy that I’ve used. Uh, that’s very good. And I think that PR given the fact that we have no emails, I think collaborative stuff with existing brands, if we can do that, I think influencers, but I think mostly if we can get some good press on this thing, It’s going to bring those moms to Kickstarter is probably going to be the first thing that just even for backs before.

Um, but that’s going to be what drives this and thankfully that the strategy that Craig and I put together, it paid off and it became the, uh, the highest funded children’s apparel in. Crap on the history. So we’re, you know, we’re proud of that. Hey, quick question. So I went to the PGMs website and I see they reference indie Gogo.

So it kicks per like a genericized term. Now kind of like when someone says search something, you Google it like good question. Good question. No, what happened? So Indiegogo used to more or less be a competitor with Kickstarter and to some degree they still are, but it’s almost like, you know, Kickstarter.

Became the clear leader. And so Indiegogo sort of accepted the fact that, you know, they’re Pepsi and Kickstarter’s cope. Right. And, uh, and just kind of owns being number two. But what was smarter than a mistake said, successful Kickstarter campaigns. They said, just roll your campaign over to Indiegogo.

It’s done. And, um, and yeah, continue to preach, sell on our platform. And so that’s what undid on Kickstarter. Then you can start another one. Is that that’s right. Getting that. Yeah. It’s not even starting in the other one. It’s it’s just like you just, yeah. I mean, series B. Yeah. Yeah. It’s yeah, exactly. It’s the next step in crowdfunding.

And you can keep that on there long. You can keep that on it for two months. I think they, I think they ask you not to pre-sell it on your own site as well for another month or two. Um, but, uh, you can, you can Prisa I think clear up until it’s you’re shipping product. And so that’s what, um, You know, Indigo has been really helpful and I think we’re now pre-selling on our own website.

And so it’s kind of cool because we’re what four and half months give or take into this. I lose track of time, but we’re not that far into it. And we’re seeing pretty consistent days where we’re only spending 200 to $250 on Facebook ads. And we’re bringing in 2000 to $2,500 a day. And the product. I mean, we live in a world where Amazon is, is King because people love largely because people love that two day shipping.

Right? It’s that impulse it’s that I want it. Now we’re telling people this, this, these aren’t even shipping until end of August and who knows. Kid is still nighttime training. So I wouldn’t have expected to see what we’re seeing. Like we’re spending 200 to two 50 and we’re getting back to grant 2,500 bucks.

Daily. So we’ve, pre-sold over 400 K um, in our site in any go though between Kickstarter and we haven’t even shipped in yet. They’re not even here, you know, it’s funny, you said you don’t even know if your kid will still be training. Um, so when I, when I, when I put in on some of the funding, I thought the same thing cause my kid, um, but I was considering it far as three.

He just turned four. But I still bought in because we had a newborn too. So I went with the neutral one, the Mike, if he’s out of it, I can, I can give it to the next gun. Yeah, that’s awesome. So you had mentioned ifs three 60, um, some of, some of the clients and accounts and products that you work with are also clients of ifs three 60.

So tell us what ifs three 60 is and what your role at ifs is. Yeah. So Devin Johnson is, uh, He and Ben white side, they were, um, the founders of first mile, what is now called first mile. And first of all is one of the largest e-commerce shipping companies in the country. Really. I mean, they, they work with huge brands all over the country and, uh, they ship, you know, tens of thousands, hundreds of thousands of packages a day sometimes.

Um, and so. They, they had a lot of their clients that were doing their own fulfillment, but using first mile rates requesting to have first mile, uh, at the time it was just called ifs, right? The volt business stall that there was no first mile yet. Um, but they requested ifs to become their one stop shop where they said, well, we want your rates and we want you to analyze fulfillment.

And so Devin was just kind of. Getting into that when he and I reconnected and I shared with him some ideas that I had that would make fulfillment a little bit more interesting in terms of adding a distribution component to it in terms of simplifying the pricing, um, which was a huge problem that I had with him.

You know, as the client of other fulfillment centers is you never knew what you were paying with. E-commerce stuff, it’s VR. You can make it a very simplified pricing model because more or less those orders are coming through and you’re going through the same process every day. So you don’t have to have these crazy variables that you might, if you’re shipping brick and mortar.

So we, we really focus on. ECommerce companies, I would say probably 80% of our clients use Shopify and that’s the bulk of their, their volume. And, uh, and so anyway, we, we got talking and I shared my ideas and, you know, he and Ben said, Hey, here’s if you help us build out this, uh, fulfillment division, then, uh, they were generous enough to.

Uh, give me equity and they offered, uh, they didn’t ask me for any money. They just said, you know, we’ll fund it. We’ll um, the first mile can bring in some leads, but we just need somebody to spearhead this. And, um, so it was kind of experimental for like six months. It was another one of those situations where, uh, you know, I was getting equity, but I wasn’t getting paid.

Um, and I, I kinda just wanted to see if we could generate business using these new ideas. Um, And I think, I don’t know, in just a few months, I think we brought in like 20 new clients and we had no room for them. And so we got this big building and, you know, we’ve filled that up relatively quick. And so that’s how we became one of the fastest growing, uh, Utah companies, uh, two years ago.

I think we were number five, according to, you know, obviously they’ll go out and. Look at the books of every single business, but we applied for this thing and a lot of people did and they ranked us number five of those that applied. And, and so it’s a, you know, it’s a good business. It’s a tough business.

It’s expensive because you have to, we think about it. We, we would have to turn away clients because we didn’t have the space for them. And then as soon as we got space, we have way more space than we needed and you have to pay for that. Carla says. Who’s in your warehouse and how much space you’re taking up.

And so it’s a, it’s a tough business to scale, and it’s a tough business just in general, like things NASA by nature go wrong with fulfillment. And that’s why it’s a huge reason why a lot of people want to outsource that to professionals. And so there was a lot of learning curves there, not the least of which.

Figuring out, who do we suck at servicing and who are we great at servicing? And so we looked, we actually learned that one pretty quick. And so we, we didn’t even try, we don’t even try to make a mass market brick and mortar based companies. We don’t even try to make that work. We’ll, we’ll, we’ll give that to somebody else and, you know, just suggest other names for them.

Um, but if somebody shipping, you know, Any substantial amount of, well, even if they’re a startup, it doesn’t matter if they’re shipping, uh, through their website. Um, then we’re probably gonna do pretty good job if they’re shifting, if they have routing guides to follow and they’re shipping pallets too, Walmart, it’s not business that we would even consider.

You had, you had mentioned a warehouse, so I’ve been at type of warehouse and it’s massive. How, how big is it as far as square footage? Well, it’s, it’s, it’s actually not that big compared to some of the other national three PL but here at salt Lake it’s 80,000 square feet, but then we have. An overflow warehouse, which is kind of where the storage product goes just down the road.

Um, so, you know, in that 80,000, it’s mostly just the pick bin and the, you know, the racking for smaller stuff. And then we can bring products back and forth to the other warehouse. And then how many do you have in that 80,000 square feet? Oh my gosh. Uh, You can ask me to, I’m basically guessing, but I’m going to say that there’s probably, I don’t know, 30,000 skews.

Wow. Um, but I’m just guessing, but it’s, it’s, it’s a lot. Cause you know, some clients might have five skews and some clients have couple of thousand. Um, but we also have a facility in North Carolina too. Um, more or less the same size. That’s a little smaller actually, if we take up less space than that, but, um, but yeah, we’ve got North Carolina, we’ve got salt Lake.

Um, and, uh, it’s yeah, it’s a good, it’s a good business and an internet industry that’s growing, you know, I mean, eCommerce is not going away. That’s why, that’s why I got away from a brick and mortar sales is I just didn’t see over time. Like, you know, my career is going to be however long it’s going to be.

And as I projected it ahead and at the end as zoomies wound down, I thought, okay, I can either keep it selling product to brick and mortar chains that are really painful, the deal with, or I can shift the focus towards this upward trend that probably isn’t going to stop in my lifetime. Right. This trend of people buying on their phones, buying on their computer.

And so. In one way or another everything that I’m involved with. I, I it’s, it’s heavily focused on e-commerce, whether it’s blacksmith the sourcing company that, that really primarily sources for eCommerce companies, ifs who only fulfill three eCommerce companies. And then just the, on the other side of things, the consumer product brands, it’s, it’s all econ, it’s nearly all e-commerce driven.

Very few brick and mortar. So I want to get into blacksmith next, but before we leave the ifs, uh, personnel topic, can you explain to our listeners what first mile?

Explain what first mile means? Yeah, so first mile there’s, there’s a lot of shit methods that the final mile is done by the post office, right? Uh, You can ship FedEx methods and ups methods, but the final delivery is done by, uh, the post man, the mailman. And so that’s, that’s largely what first mile does is, uh, they’re just doing the pickups and they they’re taking care of the first mile and they’re just injecting it into whatever, um, ship method, ship company that, that you, that make sense.

And then from there it gets, um, taken care of by, um, Whether it’s FedEx or DHL or USBs it’s taken care of by somebody else. So really if you picture like a funnel, they’re, they’re just, they’re the top of the funnel. They’re just bringing in all kinds of volumes so that each client can essentially benefit on the volume of everybody else.

So you can get better rates through them than you can on your own. But, uh, it, so, so DHL, like let’s say. You can get better rates by going to first mile first and shipping through DHL. Because first of all, I was bringing tons of volume to DHL and, and same thing with the USP. S you know, even though it’s delivered by the mailman personnel, it’s just bringing all kinds of volumes to these ship methods and they can pass back some savings.

Nice. Thank you. So back to blacksmith, um, you said that, uh, um, another entity you’re, you’re tied in with, and that those sourcing is out of that. Yeah. I mean, I’m not, I’m not like the most active guy there, but I brought them, um, the healthy portion of their business, probably. I don’t know. Oh, I don’t want to brag it up, but it, you know, I brought them some big business and, and the reason why we invested in blacksmith.

Is, uh, it just made sense. I mean, we, we wanted, we knew that a lot of our Selma clients would need sourcing services. And so we wanted, um, somebody to help them out if they had GC issues or if they wanted to save money. Um, the whole point of calling the fulfillment division, I have to estimate 60 is worth.

We’re trying to work with people from 300 to 60 degrees. Right? All different angles in your business. If we can supply you with resources and in a lot of this stuff, we’re not getting paid on it in any way. Right. We’re just, we just have this philosophy that if I can help you, uh, with PR, if I can help you with this and vet out some of these options for you to consider.

And you can grow your business. That’s how I’m going to make my money as with your volume. And so, but then in the case of blacksmith, me, Ben and Devin, all the partners involved in ifs, we made an investment in blacksmith because, uh, you know, we knew we could bring them business and it was a good fit for a lot of our clients that are always looking for new ways to cut costs, new ways to improve quality control.

And, and also, you know, they can, they can help you design new product as well. Yeah. It’s like a symbiotic kind of relationship back and forth between all these. It’s cool. It’s cool to see you just push the forward momentum from one to another. Um, yeah. Did you go, uh, so you mentioned you went to college and, um, I like at your comment offline here that you’re a master’s dropout.

So, um, What was your formal education and, and sorry, um, as business has continued to succeed, uh, you just kind of left the college pursuits where they lie. Yeah. You’d probably remember me in high school. I didn’t take high school too seriously. And so when it came time to go to college and, um, uh, I didn’t, I never took the, any entry exams.

Right. I never took the, um, I never took any because I didn’t really plan on going to college. Um, and so I found out when I enrolled first that week, or that I would have to take like math nine, 50 math, nine 60, those didn’t even count. And then I have to take 10, 10, and then I’d have to pass 10 30. Okay. Uh, when I was, but I was trying to figure out like, how do I get around?

Yeah. Um, without having to study for exams. And so I found this, this. Loophole that a call it a loophole. I don’t know what you call it, but I found this. I found that if, um, if you enroll first at the university of Utah, that you would also have to go through that same process, right? You take the equivalent of nine 50, nine, 60 10, 10 and 10 30.

And really the end goal is to pass 10 30. But if you are a transfer student to the UW, you place yourself. In your own math class and they don’t need to look at what you’ve taken before. You just, you can just sign up for whatever you want. So I thought, Oh, that’s cool. I can, um, I can switch from Weaver, go to the, you complete my generals and skip three math classes and go straight to 10 30.

And, uh, if I pass that, then I can go back to LIBOR and I skipped, you know, three math classes and I had never had to take, so I did that. Um, so I, I went and started a Weaver. What to the, you finish my generals at the U uh, actually completed all the requirements for an economics minor at the U and then went back to LIBOR and graduated in technical sales.

And then, um, started the masters at Gonzaga at the same time that Judy’s was going on. Um, and I quickly learned that, you know, I can choose between. A lot of business and a little bit of social life, but fitting in, um, trying to fit in school on top of that was a bit, uh, was a bit much. So I dropped out.

You are a wild cat. Okay. Uh, dude, I’m not anything then I’ve been everywhere. I’m actually, I’m actually a Y fan and I never even went there, you know?

Yeah, I actually texted him. I’m not a huge fan at all. Even though I completed my generals and my minor there, but no, it’s anybody really we state fan. I mean, I love them. They’re great up there, but are there sports programs? It’s anyway, I probably shouldn’t. I probably shouldn’t even say that I’m actually teaching a course, a market, an entrepreneurial marketing class, uh, that we were dissolved.

So I believe verbal. I’m a, I’m a diehard. We were state fan. I love their football program, their women’s volleyball. I’m just diehard Weeber statement. I bleed purple. How’s that piles over here on video doing the umu side.

Uh, anyway, well, let’s just hit a couple of personal questions before we let you go. Um, So what, uh, I, I, I asked you if you would tell your younger self, um, or maybe some things that you can help others that are listening, uh, kinda avoid those mistakes. He said you have a lot to say on the subject. Is, is there any, anything in particular you want to, you want to touch on?

I wouldn’t say that I have a lot to say on that subject, as much as I’ve, I’ve made plenty of mistakes. And so like, you know, who has it, I mean, I’ve I’ve had, I’ve been involved with businesses were thinking that I haven’t had any like dismal failures that really set me back. Uh, cause again, I’ve, I really take calculated risks, but I’ve been involved with things where I spent a lot of time on it, but for one reason or another, I just, uh, decided to cut my losses in terms of, you know, a little bit of money and.

It’s a little bit of time that I invested in them. Like there was one company where, uh, I got them set up with some distributors that ordered, you know, 15,000 units right off the bat. They took the PO and, you know, I have a contract with them that States that I have equity and, um, and I got commissioned, um, But then they just said, well, we can’t pay you.

We need this, these funds in the business. And I thought, well, that’s not the kind of person I want to, I want to work with somebody that accepts the purchase order and then decides to read it the rules after the fact, even though the rules are written in stone, you know, like the way that it was manipulated there’s there was no, like, we’re not talking gray area here.

Like I asked him straight up. I said, so. You don’t want to abide by the contract. And he’s like, well, we’ll just have to talk about it. And I’m like, okay, hold on. Let’s talk about it. So I learned, I learned that pretty quick. We did like, if I’m getting involved with something, I really, I don’t, um, I don’t want to work with people that I can’t trust.

And so I don’t. Uh, it’s already hard enough as it is, and there’s already enough gray area in every deal and different perceptions of things and different ways of to interpret things that you’re like. I, yeah, I’d never listened to people’s stories about how they were screwed by so-and-so. Cause I always know there’s another side to it.

Just like when you’re, you know, you talked to somebody that that’s about their ex wife or ex husband, you always know there’s a different side of that too. Right. But there’s also. Um, certain personality types, let’s say that you have to consider as a risk factor. And when people consistently show you that, uh, they’re willing to rewrite the rules in order for their own gain.

Um, no matter how excited you could be about what they’re telling you about that opportunity, uh, Your opportunity costs with that type of the deal is huge. And if it goes South, then you don’t get anything. And if it goes well, because of that, you know, if they are that person we’re we’re have slippery.

Yes. Then you’re probably far less likely to get anything because it did go well. And so, you know, in this person’s case, they found a way to, I’ve actually been roped into. Other people suing them. I mean, I’m not going to see the guy. It’s just not my thing. I’d rather just invest that mental energy into something else, even though I could, but I’ve, I’ve been roped into lawsuits to give information about another person that got burned by the same person.

And so, anyway, uh, there’s you just have to, I would say one thing is you have to be careful about who you work with, like contrast that with Ben and Devin, you know, and I Fs, these are good upstanding guys. They’re trustworthy. And the remarkable thing about Ben and Devin is they really do look to go out of their way to, um, to be fair and to reward people.

It doesn’t mean I always agree on their perception any more than I agree with my wife on everything. Right. He certainly don’t, but, but I owe it, but I fully trust that they will, um, make their best effort to, to be fair minded. And so. Um, I love that about them and I love that about really all the people that I’m working with now.

Um, I’m not, I’m not always looking over my shoulder and I don’t have, I really don’t have a level of mistrust with any of them. And, uh, and that’s huge for me because if you, if, as soon as you start to mistrust people, then. You start to pull back and you start to think about other options and maybe you might slip in your ethics to justify things.

And it’s just not the route you want to go. Another thing that I learned is, um, look, I see a lot of people that, that raised a ton of money and just go for it. Before they’ve generated some serious interest and there was one deal where it was a cool product. And, uh, and I thought, you know, if I get involved with this, I think I can sell it, but it’s probably best to take it, uh, uh, a more organic route and generate the interest first.

And I got talked into spending a lot of time on a company that, um, they were raising money and then they were going to go for it. And I remember having a conversation with an investor who is honestly way smarter than I am way wealthier than I am. And he said, no, like you, you can generate the interest later, but you gotta, we got to go for this.

And so I thought, okay. And then two years later it never got the traction that it needed. And so, um, those investors, to my knowledge, haven’t been paid back. I’ve I’ve moved on from it. Um, but the company still exists. It’s still. Alive, but, um, know for one reason or other, I don’t know what’s going to come of it.

Like I, I’m not sure that it’s going to reach its potential and it is too bad, but maybe if they had gone about it another way, generate some interest first before they started spending, before they started raising money, it was just a lesson. Another reminder to me to choose this, this route of creating demand first, before you create supply.

Yeah. Yeah. And you’ve mentioned that I even see it. You wrote down that’s back to exactly what you say. Pre-sale yeah. Yeah. It’s a concept that’s lost on a lot of people. Right. They, they watch the field of dreams or they watch, you know, some show about how the odds were stacked against somebody and they came through and it, and that stuff’s inspiring, but the odds will always be stacked against you.

Right. And so how do you bend the odds in your favor before you fail? Like, I, I don’t want to. I don’t want to compare the deals that I’m involved with. I mean, I’m involved with, I don’t know, a dozen businesses on some level right now. Um, I don’t want, I don’t want to compare myself to a baseball player who steps up.

I mean, that’s the metaphor that people always use, right? It’s a batting averages. Are you swinging for the fence to hit a home, run on a deal where you might strike out? Are you going for singles and doubles? I want to. I want to take a product that already shows, promise, um, has traction and, uh, is essentially already on first in the sense that, you know, it has potential.

And I want to, I don’t, I’m not trying to go for the home runs right out, right out of the gate. I’m just trying to get from first to second. So rather than having, uh, batting 300 and that’s, that’s good, right? I’m I’m only 30%. I’d rather, I’d rather. Put the effort into cherry picking the best deals, putting some effort into it before I take that risk.

And, and instead of striking out, if I can be a Ricky Henderson on first and, and get my way to second and advance it that way, that’s, that’s how I want to do it. Meaning like there’s some companies that I’m looking to invest in right now, but I’ll, I will only do it if I can, if I can have the option to invest in in three months.

Cut that check. But in that time period, I’m going to go out and I’m going to talk to big decision makers and I’m going to talk to, um, you know, people that would be able to give me, uh, an educated guess as to whether or not this will convert. And if I can convince myself that I can drive, uh, this business, you know, try it to revenue, then.

How much easier is it to invest at that point? Kind of like a, you know, like a land developer, we’ll tie up a piece of property and go and talk to city council. And based on that conversation, it might be worth five times as much afterwards. Um, if I ever, uh, start buying multiple businesses, I mean, that’s, that’s the only way that I would do it.

I wouldn’t just write a check. I would, I would. Have the option to write a check, but I would go out and talk to the big decision makers that would make a gigantic difference for that business. And then thinking how much you mitigated your risk that way. Sorry if that was a long way to explain a certain philosophy about, okay.

No, I got you. Yeah, but if you build it, they will come because you kept referencing field of dreams, philosophy. Well, what I’m saying is I hate that show and I hate Kevin Potter.

So, uh, kind of along that same topic, what do you, a lot of people come in to, if they’re first time entrepreneurs and they’re aspiring. Um, I think social media feeds a lot into all these dreams that people have w which is encouraging to have that. But at the same time, there’s a little bit of reality where you’re involved with so many people in so many entrepreneurs and businesses.

Is there a common misconception of getting into business that aspiring entrepreneurs need a reality check on more often than the yeah. Um, that if you’re. I was just talking to a buddy the other day that he, he told me, man, in the beginning, if you would have told me that I was doing 3 million in revenue, I would have thought I was living high on the hog, but this guy’s living on a poverty level income.

Because the more successful he is the less he can afford to pull out unless he wants to take on investors and answer to other people and no longer make the decisions that he wants to make for his business. So what a lot of people don’t realize is that if your business is successful, you still can not pay yourself in the beginning.

And that sucks. So I’ve met a lot of people that, that quit their job to start a company and. You know, they won’t even have product for six months and they’re coming and talking to me about fulfillment about how they’re going to grow this thing. And it’s going to take off and their margins suck and, and they have to live on the, you know, phew, the, the small budget they have to this business, but they’re going to make it work.

And that’s great way to be, um, That’s a great way to stack the odds against yourself. So I I’m afraid Libra and moon lining. In fact, when I invested in a PGM is with Craig, I asked him, I said, so are you going to get a job or are you going to make this your full time thing and live on this income? And he said, well, I’m no, this isn’t what you want to hear, but I’m probably going to get a job and have pajamas Moonlight.

And I’m like, dude, That makes it so much easier for me to invest because that’s exactly what I want to hear. Um, but you know, that’s my philosophy, plenty of other people that are far wealthier that would tell you otherwise, but just riskier. Um, if my, my mentality, he says, learn to outsource everything you can to competent people that you have vetted out either through your own experience or talking to people that are already using them.

And, and do it that way. And so right now, Craig has a nice job. Uh, and the business is four months old and we’ve done 400 K and I’m sure we’ll do a very profitable million dollar revenue business in its first 12 months without anybody working on a full time. And so it’s just a different way to go about it, but it’s, it’s based on me watching a lot of companies crash and burn because they sucked out.

All the money that the business needed before it could get off the ground. And there’s a lot of, there’s a lot of businesses that have died unnecessarily because of the way that they were treated in that first year or two. These are kind of refreshing different perspectives than a lot of other people saying, but they all, it makes sense all the same too.

Yeah. And they might be right. You know, based on their experience, you know, there’s, this is just. This is just me and the lessons that I’ve learned. And my philosophy like I, before this, for this podcast, I, I met with the dude who he was the CTO, yo, the company that raised $30 million when in a year that they didn’t even, I think they, that was the year they hit 30 million in revenue.

And in my mind, like you’re raising so much money relative to. Uh, your revenue, if that business doesn’t perform well, then you’re, you’re stuck and you, it of sucks because now you have to answer to people and your business really has to perform. Um, otherwise, like you wish that you hadn’t taken on those investors.

And so I was telling him, like, I respect the people that, that raise a ton of money and turn these. Businesses into, you know, a hundred plus million dollars. Cause that’s really the only, typically the only way to get that big is raise a ton of cash, but it’s just not, it’s not my philosophy. And so as I was, you know, showing respect to him for his way of going about things, he says, well, I like the way that you go about things, I sort of ended your position because you don’t have to answer to investors.

You don’t have to deal with all the BS. And so, you know, you’ll see a lot of them that in startups, this grass is always greener, whether it’s, um, different industries, you know, I got buddies that. Or making tons of money in tech and it’s, it’s not a world that I ever want to be involved with, but I respect it.

And then sometimes they’ll surprise me and say like, Oh, I want to get into consumer products. And in my mind, I’m going, do you have no idea what you’re talking about? And they would say the same thing when I started seeing and phrases of, uh, how, how much tech and scale. It’s obviously a lot riskier too.

So they, they have their battle scars that I’m not paying attention to. In the back of their heads. So, yeah. Yeah. It’s um, you know, I’ve been doing a lot of, um, social media influencing lately and I’ve, I’ve been joining these groups of, uh, successful entrepreneurs and where they, they do mentoring. And what I see a lot is when these, these new entrepreneurs come in, a lot of times they say, Hey guys, I need your help.

I’m wanting to start a company that does X, Y, and Z. What’s the best way to find a new business. And it’s amazing to me, how, how new aspiring entreprenuers immediately go to the funding route. And I I’m the total opposite and it sounds like you’re having the same, but I do agree it takes money to scale a business.

I think you got to put in the elbow grease first.

Yeah. Yep. Ryan, uh, entrepreneur extraordinary and King of Facebook profile pictures. Thanks for joining us. Hey, wait, spin them up. Spin them up. No, I have it up. I got it. Ready? Yeah. Hey Ryan. So we got this. Um, so we started closing out these podcasts with a random question generator. So sorry, I’m going to give you a free pass on this one.

Cause I don’t know how I’d answer this. If you could choose to have any useless superpower, what would you pick?

You gotta define useless though. Cause like it’s an hour nap. I got an, I got, I got, I already have, I already had another one ready. Okay. Okay. What weird food combinations do you like Ryan? Oh my gosh. Well the taco place that I mentioned that Craig and I would meet up. It’s actually

those, see, those are real tacos. This is Vietnamese tacos, which means he takes is the meat that he puts in his fi and he throws him in tacos. Um, and so a lot of people think that I’m weird because one of my favorite restaurants is a Vietnamese taco place in a shopping mall, food port. Um, but other like, dude Ali, I will eat.

Just about anything other than like a sloppy Joe. Like there’s not a lot of foods that I just won’t at least try, you know, I love trying new foods, um, varieties of spots. I said life, right? So I’m always checking out restaurants in every city that I’m in, based on Yelp reviews and always willing to try the funkiest things.

Um, but, uh, Yeah, there’s very few to that very few foods that I won’t eat, but I can’t really think of anything where like on a regular basis, um, combining, uh, foods that seem gross. I can’t really think of anything there. I think Vietnamese taco counts. Yeah. I was going to say, there’s this place in Clearfield.

You got to try, they make a burrito. So it’s basically the same thing and Oh man, they’re awesome. What’s that it’s basically what you said. So they take their, their five ingredients and then yeah, like a burrito though. That sounds awesome. Yeah, it is. It’s just, all right. I’m not burritos. I mean, where do you go wrong?

Alright. That’s where we’re going. Okay. Right. Either in 10. Thanks for joining us. Right. Thanks Ryan.